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Letitia James

New York Attorney General Letitia James speaks at a press conference in New York City on June 11, 2019. (Photo: Drew Angerer/Getty Images)

NY Appeals Court Rules Trump and Two of His Kids Must Testify in Financial Fraud Case

"Our investigation will continue undeterred because no one is above the law," said New York Attorney General Letitia James.

Kenny Stancil

A New York appeals court ruled Thursday that former President Donald Trump and two of his adult children must sit for depositions as part of the state's ongoing civil probe into the Trump Organization's allegedly fraudulent business practices.

"A court has once again ruled in our favor and ordered Donald Trump, Donald Trump Jr., and Ivanka Trump to appear before my office to testify under oath," New York Attorney General Letitia James tweeted. "Our investigation will continue undeterred because no one is above the law."

A four-member appellate panel upheld a late-February decision by New York Supreme Court Justice Arthur Engoron, writing that he had "properly rejected appellants' arguments that the subpoenas issued by the [Office of the Attorney General] should be quashed."

James, a Democrat, subpoenaed Trump, Donald Jr., and Ivanka in December for documents and testimony. Just last month, Engoron held Trump in contempt for refusing to comply with his March 31 deadline to turn over documents to the attorney general's office.

According to Thursday's ruling by the appeals court, a parallel criminal probe conducted by the Manhattan district attorney's office doesn't inhibit James from seeking testimony in her civil investigation.

"The existence of a criminal investigation does not preclude civil discovery of related fact, at which a party may exercise the privilege against self-incrimination," the court wrote in a four-page order.

The judges also dismissed the Trumps' complaint that they have been "selectively prosecuted" due to the ex-president's right-wing political beliefs, CNN reported.

As the news outlet explained:

The decision is a setback for the Trumps who have sought to avoid testimony in the attorney general's investigation. James' office in January said it found "significant" evidence indicating the Trump Organization used false or misleading asset valuations in its financial statements to obtain loans, insurance, and tax benefits and she needed to interview the Trumps about their involvement. Attorneys for James' office [have] previously said the investigation is nearly finished and a civil enforcement action may follow. They are scheduled to interview Trump's longtime assistant Rhona Graff next week. She served as a gatekeeper for Trump for decades until April 2021.

    The ruling comes just two weeks after the appellate panel expressed skepticism during oral arguments on the deposition dispute. During the hearing, Judge Rolando Acosta asked Trumps' attorney about their Fifth Amendment right to not answer questions: "What prevents you from just invoking it? Why do we need to intervene in this case or constrain the authority given to the attorney general?"

    The Trumps have argued that James is trying to end-run the grand jury process, where witnesses receive transactional immunity for their testimony in New York. The lower court judge rejected that argument saying they could invoke the Fifth, a ruling the appeals court agreed with.

    Eric Trump, who alongside his brother Donald Jr. took over the day-to-day operations of the Trump Organization in 2017 when their father assumed office, invoked his Fifth Amendment right against self-incrimination more than 500 times to avoid answering questions when he was deposed by James in October 2020.

    The New York AG opened her civil investigation of the Trump Organization in 2019 after Trump's former lawyer Michael Cohen testified under oath that the family business empire inflated the values of certain properties to secure favorable loan terms and deflated others to reduce real estate taxes.

    James' office has also assisted with a pending criminal probe launched in 2018 by then-Manhattan District Attorney Cyrus Vance Jr.

    After obtaining years of Trump's personal and business tax records following a protracted legal battle with the former president that went all the way to the U.S. Supreme Court, Vance indicted the Trump Organization and its chief financial officer Allen Weisselberg last July on charges of "carrying out a 15-year scheme to dole out off-the-books luxury perks to certain executives," as the New York Times described it.

    A criminal trial has been scheduled for later this year. However, prosecutors Carey Dunne and Mark Pomerantz resigned in February after Manhattan's new district attorney, Alvin Bragg, took over the case in January and expressed concerns about moving forward with it.

    Earlier this week, progressive advocacy organizations Free Speech For People and Daily Kos launched a petition urging New York Gov. Kathy Hochul to use her authority to reassign the criminal investigation of the Trump Organization to James' office or to another district attorney's office in the state.

    Other inquiries, including into Trump's effort to overturn election results in Georgia and into the deadly insurrection at the U.S. Capitol on January 6, 2021, could still result in criminal charges.


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